Here’s what people get wrong when debating automation: Stanford professor

Silicon Valley has changed the way we get around, the way we communicate, and the very way we live. While Forrester Research estimates technologies like artificial intelligence, machine learning and automation will eliminate 7% of all U.S. jobs by 2025, those numbers belie the advantages those technologies can bring society.

“I think a common error is to focus on a small set of people that are harmed without thinking about a wider set of people that receive benefits,” explained Susan Athey, the economics of technology professor at Stanford’s Graduate School of Business.

“Transportation is a big component of the cost of goods and services,” Athey added. “It’s a component of the cost of food. So if you think about lowering the cost of living for the entire country by providing an essential service less expensively, those welfare benefits just dramatically swamp the harm to people who are professional drivers.”

Uber, for instance, began developing self-driving car technology in earnest since at least 2015, when it opened its Advanced Technologies Center in Pittsburgh. For the popular ride-hailing company, rolling out safe and secure self-driving technology that replaces human drivers is one way to increase efficiency and reduce costs in the long run, which in turn, could mean more inexpensive rides for passengers.

“If you could reduce commuting time, or if you could make commuting time a time when you could do other activities, you could make the entire country better off,” Athey explained. “I don’t put my kid in an activity because it’s too hard logistically to get them from school and back home again. If you could reduce those transportation costs, then I might spend money — instead of spending time in the car — on these entrepreneurs who are selling classes or activities to my children, or I might spend more money on restaurants, on bars, or on travel.”

A $1.4 trillion tax plan

Representative Ro Khanna represents the 17th District of California, which includes a significant chunk of Silicon Valley.

If Khanna agrees with Athey on one thing, it’s that workforces will almost certainly undergo significant transformation as A.I., machine learning and automation are more widely deployed across different industries in the years to come.

“I think this is exactly the challenge for the country is how do we navigate the transition and make sure that people are participating in it,” Khanna told Yahoo Finance.

“I don’t think companies sit there saying, ‘How can I create jobs?'” Khanna added. “This is where the role of government is so important, because the government — which is the people — has some social context. We think about, ‘What is it gonna mean for healthcare? What is it gonna mean for job creation? What is it gonna mean for people being displaced?'”

To help combat that, Khanna has introduced legislation that would expand the Earned Income Tax Credit to all Americans and essentially grant tax credits to low- and middle-income Americans. The proposal, which would cost $1.4 trillion over the next 10 years, is intended to help improve stagnant worker wages and rising instability caused by the shift from regular full-time jobs with benefits to jobs lacking benefits, such as say, Uber and Lyft drivers.

It’s Khanna’s hope that increasing wages for some Americans proves helpful for those experiencing challenges achieving 40-hour weeks in their current jobs as newer, more efficient technologies are introduced in the workplace and also for those having difficulty switching careers.

The transition will no doubt be a bumpy one for many workers, but also hopefully a journey where few are left behind.

—

JP Mangalindan is the Chief Tech Correspondent for Yahoo Finance covering the intersection of tech and business. Email story tips and musings to jpm@oath.com. Follow him on Twitter or Facebook.